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Long-Term Debt
6 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Long-Term Debt

Note 7. – Long-Term Debt

Long-term debt consisted of the following:

 

 

 

December 31,

2019

 

 

June 30,

2019

 

Trace RDA Loan

 

$

316

 

 

$

2,999

 

Capital Lease

 

 

143

 

 

 

159

 

Less unamortized debt issuance costs

 

 

(22

)

 

 

(195

)

Less current maturities

 

 

(327

)

 

 

(2,836

)

Long-term Debt

 

$

110

 

 

$

127

 

 

Trace RDA Loan— Southern Health Corporation of Houston, Inc. (“Trace”) a wholly owned subsidiary of the Company, closed on a $9,975 Mortgage Loan Agreement (“Trace RDA Loan”) with a bank, dated as of July 5, 2012. The Trace RDA Loan has a term of 15 years with level monthly payments of principal and interest until repaid.  The Trace RDA Loan interest rate is the prime rate (as published in the Wall Street Journal) plus 1% with a floor of 5.5%, (5.75% at December 31, 2019). The Trace RDA Loan is collateralized by real estate and equipment of Trace and is partially guaranteed under the U.S. Department of Agriculture, Rural Development Business and Industry Program.

On October 7, 2019, the Company made a $2,500 pre-payment on the Trace RDA Loan.  The pre-payment was made with cash on hand.  The Company recorded a non-cash loss on early extinguishment of debt relating to the pre-payment of $160 during the three and six months ended December 31, 2019.

Based on the current Trace RDA Loan amortization schedule, the outstanding balance of the Loan is required to be repaid in October 2020.  Accordingly, the outstanding loan amount at December 31, 2019 is classified as a current liability.

On February 12, 2020, the Company paid the outstanding balance of the Trace RDA Loan.  See Note 16. – Subsequent Events.

The Trace RDA Loan contains various covenants, terms and conditions, including financial restrictions and limitations, and affirmative and negative covenants and is guaranteed by SunLink.  The covenants include financial covenants measured on a quarterly basis that require Trace to comply with a ratio of current assets to current liabilities, debt service coverage, fixed charge ratio, and funded debt to EBITDA, all as defined in the Trace RDA Loan. At June 30, 2019, Trace was not in compliance with the debt service coverage, fixed charge coverage and funded debt to EBITDA ratios.  The Company had discussed with the lender a waiver of this non-compliance, but a waiver of non-compliance has not been received as of the date of filing this report. Trace was in compliance with the covenants as measured at September 30, 2019 and December 31, 2019. No event of default has been declared by the lender as of the date of the filing of this report nor is such a declaration currently anticipated.